Buying a home is a tough experience, so much so that it feels like a Herculean task. It’s not only because of the heaps of paperwork that need to be done but also because of the terminology, large numbers of people involved in the process, and the fees. Once you’re the homebuyer, it’s natural for you to feel like agreeing to whatever is being said in order to sign and get things done as soon as possible.
But if you’re a first-time homebuyer, you might come across several challenges while buying a new home. First-timers usually don’t get the chance to take out equity from a previous home sale which often makes their down payments much lower when compared to seasoned buyers. Nevertheless, there are first-timer-friendly mortgage lenders like MLD Mortgage that offer several pocket-friendly plans for new buyers.
Besides the customized plans offered by such companies, there are several federal homebuyer programs that can make it easier for first-timers to grab a loan. You can read this article on How do you get large value mortgages. Let’s check out some such options.
VA Loan
Did you know that the US Department of Veteran Affairs, also known as the VA, provides all sorts of assistance to its service members, their surviving spouses, and veterans to help with their dreams of becoming a homeowner? VA loans usually don’t require any down payment or the requirement for getting mortgage insurance. However, their process approval is still there to maintain accuracy and transparency. The lender will only check your current income and debt-to-income ratio before approving your VA loan.
FHA Loan
This is most often the go-to option for most Americans who are planning to buy a home for the first time. For instance, if you are planning to buy a home in Florida but have a shaky credit history, getting FHA loan requirements in Florida is undoubtedly the best option. The Federal Housing Administration will back up a part of FHA mortgages which makes the lenders more lenient while approving loans. Since the FHA guarantees these loans, borrowers will only require paying down 3.5% of the total loan amount for qualifying. However, FHA loans have an upfront, built-in added cost – mortgage insurance premiums.
DPA Loans
Are you still struggling to arrange the down payment of your mortgage loan? If yes, you might qualify for DPA or down payment assistance loans These loans can drastically reduce the amount you have to pay down for loan qualification. Examples of these types of loans include deferred payment loans, second mortgage loans, or forgiven loans.
Fannie Mae and Freddie Mac Loans
Well, these two names might sound like rock bands from the ‘80s but they are actually the foundation of the entire home loan procedure. They are federally-sanctioned companies that work with several mortgage lenders to offer the most alluring options on conventional mortgages. They offer you loans with as little as a 3% down payment.
USDA Loan
You might not be aware of the fact that the US Department of Agriculture also has a homebuyer’s assistance program. By reading the name, if you think you should be a resident of the farm to qualify for such a loan, you’re wrong. This assistance program targets the rural areas and promote 100% funding by guaranteeing the mortgages offered to the borrowers. However, there are limitations on income thats differ by locality.
State first-time homebuyer Loans
Apart from the government-backed programs mentioned above, there are other local and state government offers for homebuyers as well. You may learn more about the various first-time homebuyer programs offered by your state through their websites. Doing a little bit of research to learn about these offerings can help you make an informed decision on which is best for your situation.
So, if you’re a first-time homebuyer, there are several loans, grants, and other financial assistance programs that can facilitate the process of buying a home. These programs help you with reduced closing costs, down payments, or even tax credits. Explore all your options before settling down with one particular type.
